‘This is immoral’: Boise imposes restrictions on firm wanting to convert senior home

A developer hoping to convert a Boise senior home into apartments would have to provide substantial financial help to residents forced to move.

Arbor Village at Hillcrest is home to 93 elderly residents, and its owner, DiNapoli Capital Partners, has applied to turn the assisted-living home into an apartment building.

That effort has outraged a number of residents and their families, who argue that forcing vulnerable people to move could jeopardize their health, and that senior care housing – especially that accepts Medicaid – is difficult to find.

City leaders have also been skeptical of the developer’s actions, as residents of the home have testified to receiving mixed messages about the plans for the site. In October, the Boise City Council found that DiNapoli had failed to properly notify its residents because it sent notice of an upcoming hearing to its own front desk, rather than to each apartment. The council remanded the application to the Planning and Zoning Commission, and asked the company to notify each of its residents of what was coming.

On Tuesday, the commission imposed new restrictions on DiNapoli, a private-equity firm from Walnut Creek, California.

To move forward with a multifamily development, DiNapoli would have to allow residents one year to find a new place to live — the company had proposed four months — and to pay for the cost of relocation. The company had proposed helping connect residents with new senior centers without providing financial assistance.

For three years, the company would also have to pay the difference in rent if residents have to pay more at a new home, or it could provide a lump sum payment instead.

“We absolutely have to be doing more for these folks,” Commissioner Meredith Stead said. “The City Council kicked it back to us for that reason exactly.”

Some commissioners had harsh words for DiNapoli. Stead called the company’s explanations “condescending” and its plans “insulting,” while another commissioner called the company “purposefully vague.”

The commission’s decision can be appealed to City Council.

Boise assisted-living residents plead: Save our homes. Don’t turn them into apartments

‘We could have done a better job communicating’

In January 2022, DiNapoli applied for a conditional use permit to redevelop the senior home at 1093 S. Hilton St. as apartments.

On Tuesday, Michael Sieman, the company’s vice president, said the economics of senior care are in trouble, and that running such a home is often not profitable.

He also began his presentation by apologizing.

“This process has caused a lot more of a frenzy than we had initially anticipated,” he said. “There’s been a lot of misinformation and rumors, which led to confusion. We could have done a better job communicating, and I’ll take responsibility for that.”

DiNapoli bought the home in 2019. Sieman said a combination of COVID-19, inflation and labor-market changes have led the home to operate at a loss.

During the pandemic, the cost of operating the home rose by $1 million, and the company lost $1.5 million operating Arbor Village, Sieman said.

“The rent our residents pay does not cover the costs to run our community,” he said, noting that in 2022 the company “essentially subsidized” each resident by $7,750.

“We paid money for our residents to live at our community,” he said.

Sieman said there is room at other senior homes in Boise for residents to move to. He said tenants often move elsewhere on short notice when they like the food at another residence or have a romantic relationship.

During questioning, commissioners focused on Medicaid, a federal program that provides health care to low-income people and which many Americans rely on late in life to pay for care. A third of Idahoans who live at assisted-living homes rely on Medicaid, according to the National Center for Assisted Living.

The federal government reimburses companies for services to people who qualify for Medicaid, but Sieman said the cost of caring for residents on Medicaid is four times what the reimbursement is.

“We’re struggling to pay our bills as it is,” he said.

On its website, DiNapoli says it is a real estate investment firm that has “executed” more than $7 billion in real estate transactions and has “expertise in all phases of the real estate investment lifecycle.”

Boise’s assisted living centers remain full, leaving many patients stuck in hospitals

‘This is not how you treat people’

During public testimony, family members of residents had sharp words for the company and argued that finding housing for seniors is very difficult.

Less than a year ago, the Idaho Statesman reported on a shortage of assisted-living centers in Boise, which has been exacerbated by staffing problems. Lori Dicaire, an investigator with the Intermountain Fair Housing Council, said nine Treasure Valley long-term care homes with 310 beds have closed in recent years.

One man asserted at the hearing that finding a care home for his mother was more stressful than combat in Vietnam.

Some facilities have space for residents to sleep only two to a room, which has led to concerns about what Arbor Village residents would do with their pets.

Michelle Whipple, who lives in Cascade and whose mother lives at Arbor Village, called the company’s plans “shameful.”

“This is not how you treat people,” she said. “This is how you make money.”

A woman who said she works with seniors said she thought the company had overestimated the availability of beds at other locations.

Another resident explained that private communities will often accept new residents only if they will first pay out of pocket. After a period – often six months or longer – residents, who have by that point spent down their savings, qualify for Medicaid. But if a resident has spent savings and sold assets to be able to pay out of pocket for the required period, moving to a new home with a similar requirement could be unaffordable, he said.

‘This is immoral,’ commissioner said

During public hearings over the last year, residents or family members at Arbor Village have accused the company of being unclear about its plans.

According to previous Statesman reporting, speakers at a hearing last April said residents had received letters assuring residents that the owner was unlikely to convert the community to apartments, and that it was a “contingency plan” while the center was still taking in new residents.

The letters told residents the company would provide service “for many years to come” and that “there is no plan to move forward with a different use of our building.”

Marc Seidenfeld, whose brother lives at the home, appealed the commission’s initial approval last April on the grounds that notice had not been properly given.

“They misrepresented the situation by sending out a letter telling people ‘we’re not going ahead,’ and then they went ahead anyway,” he told the Statesman in October.

That month, Amanda Schaus, an attorney for DiNapoli, told the City Council that signs advertising the hearing had been posted on the property, and that staff members had met with residents about the potential changes.

On Monday, commissioners noted how, more recently, the company’s written plans differed from what it was saying at the hearing.

“What we’ve heard tonight has been contradictory to the packet,” Stead said, referring to the packet of documents compiled by city staffers for the commission before each meeting. “We heard tonight that they would provide transportation. However, in the packet it said that ‘the responsibility for transportation varies.’”

Stead added: “A little compassion can go a long way. I want to fight for these residents in a way that I hope somebody would fight for me someday when I need it.”

During closing remarks, Schaus said requiring the company to pay for residents to move would be an “undue financial burden.”

Sieman said senior care problems are industry-wide and would not be solved that night.

After the hearing, Schaus told the Statesman that she didn’t think “any decisions have been made” about what the company plans to do. She declined to comment further.

All commissioners but one voted to approve the conversion with conditions proposed by Commissioner Chris Danley.

Danley said the commission was attempting to thread a needle, because DiNapoli “could close the doors tomorrow. They have the legal right to do that, and if they did, there’s fewer conditions in that situation than what we’re doing here.”

Commissioner Chris Blanchard said that DiNapoli’s plan should be denied instead.

Blanchard said the commission was being asked “to bail out a private equity firm who’s overexposed in a particular asset class. That doesn’t make any sense to me.”

“Our city code is supposed to be a reflection of our morals and ethics,” he said. “And this (development) is immoral and unethical.”

He said he didn’t think the company had the “capacity” to execute the conditioned plan anyway.

Blanchard said he thinks no one on the commission wants to see another application like this again, and that it is “incumbent” upon the city to “start thinking about this kind of infrastructure as our infrastructure” by working with senior care companies or making a “no net-loss housing policy.”

“We don’t have to sit here like we can’t control this situation,” he said. “We can control the situation.”